Mark

EOG Resources Inc. CEO Mark Papa warned Tuesday that North American natural gas prices may well be “north of $5” by this summer because supply is falling faster than the growing demand. Papa reiterated that internal company numbers indicate North America “in a considerable bind for summer refills and also going into next winter” — with no relief in 2004.

Going against the grain and current consensus views, Raymond James analyst Marshall Adkins and his group said Monday that they believe natural gas prices will average $5/MMBtu next year, which would be about 50% higher than average 2002 prices and substantially higher than most, if not all, other gas price forecasts by analysts, consultants and the federal government.

One day after the company announced that its asset sale total-to-date had reached $911 million, Aquila Inc. on Wednesday reported additional asset sales to bring the current total of assets it has sold or agreed to sell to $976.6 million. The boost moves the company closer to its stated goal announced in May to sell at least $1 billion in assets to strengthen its balance sheet and credit (see NGI, May 27).

One day after the company announced that its asset sale total-to-date had reached $911 million, Aquila Inc. on Wednesday reported additional asset sales to bring the current total of assets it has sold or agreed to sell to $976.6 million. The boost moves the company closer to its stated goal announced in May to sell at least $1 billion in assets to strengthen its balance sheet and credit (see Daily GPI, May 22).

Earlier this month, Mark Papa, the CEO of EOG Resources Inc., offered a pessimistic assessment for the decline rate in U.S. natural gas production in 2002 (see NGI, Sept. 9). He said then that production would fall between 5-6% over 2001. Tuesday, EOG lowered its expectations, predicting production will fall 7%.

Earlier this month, Mark Papa, the CEO of EOG Resources Inc., offered a pessimistic assessment for the decline rate in U.S. natural gas production in 2002 (see Daily GPI, Sept. 6). He said then that production would fall between 5-6% over 2001. Tuesday, EOG lowered its expectations, predicting production will fall 7%.

Similar to other recent forays above the $3.00 mark, Wednesday’s price surge in the natural gas pit at Nymex was short-lived as locals and speculative accounts liquidated new longs and reinitiated short positions. After topping out at $3.04 at 10:15 a.m. EDT, the September contract shuffled lower throughout the session, ending down 6.5 cents at $2.91. Estimated volume was moderate, with 93,329 contracts changing hands.

Capping a week that bull traders would like to pretend never happened, natural gas futures continued to fall Friday as sellers continued to methodically and justifiably extend their short holdings and pressure prices lower. After gapping lower following the holiday weekend, the February contract never looked back as it etched a new life-of-contract low in each session last week and sunk to a new four-month prompt contract low at $1.99. February closed at $2.037 Friday, down only 1.1 cents for the day but off a hefty 19.9 cents for the week.

Amid updated weather forecasts confirming the warming trend that is set to engulf the entire Eastern half of the nation this week, natural gas futures dove lower Tuesday, as traders returned from the holiday weekend and promptly liquidated long positions initiated early last week. February took the selling squarely on the chin, gapping lower at the open bell, and not once looking back as it came just one tick away from notching a new contract low at $2.094. It closed with an even 13-cent decline at $2.106.